Alex Barnes, Greater China Co-CEO at JLL, projects a 5% increase in Hong Kong residential prices for 2026. This optimistic forecast is attributed to the financial hub's ongoing economic recovery. Barnes specifically highlights a positive outlook for the luxury property market within Hong Kong.
This sentiment aligns with broader market observations, where residential transaction volumes surged by 54.0% year-on-year in Q1 2026. The primary market showed particular strength in the first two months of 2026, averaging over 2,000 new home sales monthly, which is more than double the volume from the same period in 2025. Developers responded to this demand by raising prices by 4-5% and reducing average discounts, indicating improved market confidence. Mortgage rates remained stable around 3.3% in Q1 2026, contributing to the stability.
Mass residential capital values saw a 0.5% quarter-on-quarter increase in Q1 2026, reaching their highest point since October 2024, with five consecutive months of month-on-month gains. Luxury residential capital values also increased by 0.3% quarter-on-quarter in Q1 2026, following a 0.2% rebound in Q4 2025. The transaction volume for properties valued at or above HKD 20 million surged by 120.0% in January-February 2026 compared to the previous year, with Knight Frank reporting 80 transactions in the super-luxury segment (above HK$78 million) in Q4 2025, the highest since Q4 2021.
The luxury leasing market demonstrated robust demand in Q1 2026, primarily driven by the return of expatriates and sustained interest from mainland Chinese professionals and families. Luxury residential rental values rose by 1.2% quarter-on-quarter in Q1 2026. Experts anticipate luxury rents to continue rising, with JLL projecting a 0 to 5% increase over 2026 and Knight Frank forecasting a 3% to 5% rise. This is supported by tight supply in prime districts and consistent demand from these groups. Anecdotal evidence suggests a significant return of overseas professionals, particularly in financial services, leading to increased demand and rising rents in areas like Mid-Levels East, with some areas seeing increases of 14% year-on-year.
